Income support and crop insurance give farm sector a leg up in Telangana

Agriculture and allied sector, supported by the Telangana government’s income support and crop insurance schemes for farmers, has been a significant contributor to economic growth in the state since 2016-17.

According to state government data, around 6.3 million farmers have so far received Rs 50,000 crore under the Rythu Bandhu scheme launched in 2018. The Central government emulated the Rythu Bandhu and launched Pradhan Mantri Kisan Samman Nidhi (PM Kisan) in 2019.

Under the Rythu Bandhu scheme, the state government has been crediting Rs 5,000 per acre per season into bank accounts of land-owning farmers ahead of rabi and kharif seasons.

The state has reported a robust growth rate in agriculture and allied sector in current price gross value added (GVA) of 12.24% and 9.09% in 2020-21 and 2021- 22, respectively. The agriculture and allied sectors in the state remained strong throughout the pandemic.

“This has been achieved through a multitude of factors including new irrigation schemes such as the Kaleshwaram Lift Irrigation Project and Mission Kakatiya, and innovative agricultural support policies like the Rythu Bandhu, Rythu Bima schemes, and 24×7 free power supply to the agriculture and allied sector,” according to the state government.

Rythu Bima was launched in 2018 with the objective of providing financial relief and social security to the dependents in case of loss of farmer’s life.
The entire premium is borne by the state government while all the farmers irrespective of their land holding size, are eligible for the insurance scheme.

In the event of the death of the enrolled farmer due to any cause, the insured amount of Rs 500,000 is transferred to the nominee bank account within 10 days. According to TSEC, since 2018-19, the state government has settled claims to theextent of Rs 3,763 crore and transferred the amount to the 75,276 bereaved families.

“Policies like the Rythu Bandhu scheme have not only benefited the primary sector, but have also had spillover effects on the secondary and tertiary sectors,” TSEC stated. It stated that direct benefit transfer into the bank accounts of the farmers under Rythu Bandhu, have led to increased liquidity in the hands of the farming households.

“This in turn has been utilised by the farmers for buying goods produced by the industrial sector, and for availing services, thus creating knock-on effects for the non-farming sector as well,” the government stated.

According to state civil supplies corporation data, on the procurement front, the Telangana government agencies procured 25.24 million tonne (MT) of paddy and 3.95 MT of cotton at minimum support price during 2019-20 and 2020-21.

The state also reported about 27% increase in paddy procurement in 2020-21 over 2019-20. With a livestock population growth of 22.21% between 19th and 20th Livestock Census (2012 and 2019 respectively), the state has been leading the growth in livestock population in the country.